Whether you are an investor, company executive or board member, or an issue advocate, or civic leader, these “high probability” outcomes should keep you up at night: more superstorms; more drought; increased risk of forest fires; more floods; rising sea levels; melting glaciers; ocean acidification; increasing atmospheric water vapor (thus, more powerful rainstorms)…and more.

How about a potential drop of 10% in the U.S.A. Gross Domestic Product by end of this century?

These are some of the subjects explored in depth in the fourth “Climate Science Special Report” of the U.S. Global Change Research Program. That is a collaborative effort of more than a dozen Federal departments, such as NOAA, NASA, US EPA, and executive branch cabinet offices of Commerce, Agriculture, Energy, State, Transportation, and Defense; plus the OMB (Office of the President).

The experts gathered from these departments of the U.S. government plus a passel of university-based experts, reported last week (in over 1600 pages of related content) on the “state of science relating to climate change and its physical impacts.”

The CSSR (the Climate Science Special Report) serves as a foundation for efforts to assess climate-related risks and inform decision-makers…it does not include policy recommendations. The results are not encouraging – at least not in November 2018.

The National Oceanic and Atmospheric Administration (NOAA) is the lead agency working with NASA and other governmental bodies to develop the report – which analyzes current trends in climate change and project major trends out to the end of this 21st Century. The focus of the work is on human welfare, societal, economic, and environmental elements of climate change.

Each chapter of the report focuses on key findings and assigns a “confidence statement” for scientific uncertainties. There are 10 regional analyses of recent climate change (such as the Northeast, and Southern Great Plains).

Some highlights:

(1) This period is now the warmest in the history of modern civilization.

2) Thousands of studies have documented changes in surface, atmospheric and oceanic temps;

(3) glaciers are rapidly melting;

4) we have rising sea levels;

5) the incidence of daily tidal flooding is accelerating in more than 25 Atlantic and Gulf coast cities.

The various findings, the authors point out, are based on a large body of scientific, peer-reviewed research, evaluated observations and modeling data sets. In this report, we should note, experts and not politicians speak to us in clear terms.

Global climate is projected to change over this century (and beyond) – the report is replete with “likelihoods” of events) and the experts state that with major effort, temps could be limited to 3.6°F / 2°C or less – or else. Without action, average global temperatures could increase 9°F / 5°C relative to pre-industrial times – spelling disaster at the end of the 2100s.

This new national assessment from the Federal government should be a valuable resource for investors, bankers, insurance carriers and a wide range of companies in their scenario planning (content related to alternative scenarios is in the report).

Our Top Story in Sustainability Highlights this week isThe Washington Post’s take on the report and its issuance by the Federal government on what some officials considered to be a slow Thanksgiving Friday news period. The news coverage that followed was anything but “slow”!

Washington Post – Climate story by Brady Dennis and Christ MooneyMajor Trump administration climate report says damage is ‘intensifying across the country’
(Friday November 23, 2018) Source: The Washington Post – Scientists are more certain than ever that climate change is already affecting the United States — and that it is going to be very expensive. The federal government on Friday released a long-awaited report with an unmistakable message: The effects of climate change, including deadly wildfires, increasingly debilitating hurricanes and heat waves, are already battering the United States, and the danger of more such catastrophes is worsening.

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Questions: Is Accounting as we know it now outmoded … beyond Its usefulness to investors? We share with you today the views of a global thought leader on Accounting and Corporate Reporting — Dr. Baruch Lev of Stern School of Business at New York University.

Professor Lev’s shares his views of the vital importance of intangibles to investors, with his call for far greater corporate transparency being needed … including his views on the importance of CSR and sustainability.

His latest work: The End ofAccounting – and the Path Forward for Investors and Managers — authoredbyDr. Baruch Lev and Dr. Feng Gu of the University of Buffalo/ SUNY. The professors’ important new work is the result of three years of research and collaboration, In the book they that suggests new approaches are needed to reform “old” accounting practices to provide more information of value to investors, who are mostly ignoring corporate accounting.

And as read the book, we were thinking: what about ESG – CSR – Sustainability – and other new approaches that do focus on many intangible aspects of corporate operations? We had a conversation with Dr. Lev and share his views on this and more with you today.

After reading the book, readers may ask: Is this about the “The End of Accounting?” Or, “The Beginning of Really Useful Financial Information for Investors?” My view: It’s both!

And we discuss needed reforms in corporate reporting, for you to think about: Are U.S. public companies prepared to publish the authors’ recommendations for a Resources and Consequences Report for investors’ benefit? Read on to learn more…

And for sustainability / CSR professionals: This is an important new work for your consideration that focuses on the importance of intangible information for investors to help guide their decision-making.

First, some background:

Accounting as we know it has been around for 500+ years. Fra Luca Bartolomeo de Pacioli, the Italian mathematician (c 1447-1517) set out the principles of the double-entry bookkeeping system for the merchants of Old Venice in his 1494 work, Summa de Arithmetica, Geometria, Proportioni et Proportionalita, a very important textbook of the day.

This “Father of Accounting” put forth the important concepts of ledgers, journals, credits and debits (and the balancing of same); A/R, A/P, Cost Accounting and much more. His is a rich legacy in the accounting and business worlds. **

But now, Professor Baruch Lev posits in his work with colleague Professor Feng Gu, we really need to reform this five-century-old approach to how we account for the financials and think and act way beyond the traditional.

Their Recommendations:

Let’s begin with the corporate “intangibles” – some investment professionals still speak of a company’s ESG / Sustainability / Responsibility strategies, programs and actions, achievements, and the burgeoning reportage of same (data & narrative) as addressing the intangibles (and not “the tangibles,” represented by the financial data).

But many analysts and asset managers look far beyond the financials to help determine the valuation of a public issuer. For example, veteran financial analyst Stephen McClellan, CFA, formerly VP and head of research for Merrill Lynch and author of the best seller, “Full of Bull,” has told conference audiences that as much as 80% of a corporate valuation may be based on the intangibles.

Writing for investors, Professors Lev and Gu put forth their suggestions for dramatic accounting and corporate reporting reform. They “establish empirically” in their work that traditional corporate accounting is failing investors and reforms are needed.

Their recommendation: have companies publish a “Resources and Consequences Report” with five main elements:

Development of [Corporate] Resources;

Resource Stocks;

Preservation of Resources;

Deployment of Resources;

Value Created.

Some of the information could be financial, as in today’s disclosures. But other information could quantify data, and there could be qualitative information as well. (Sounds like we are looking at some of the sustainability reports of corporate sustainability leaders?)

The elements of the report the good professors recommend:

Development of Resources: Detailed descriptions for investors of the company’s important internal research efforts, the R&D advances, the further development of present technologies to leverage to create value, etc. After “proof of concept,” how does the R&D contribute to the value of the company?

Resource Stocks: The company’s intellectual properties, the assets that are the foundation of investor value. (Patents, trademarks, processes, etc. — all “intangibles” that are in fact very tangible to investors.)

Preservation of Resources: The safety/security of such things as a company’s digital assets, IT, IP, and so on; are there cyber attacks? Was there damage – to what extent? What does the company do about these attacks? How does the company manage and secure its acquired knowledge?

Deployment of Resources: As the company creates “value,” how are the strategic resources deployed? How does the company use its intellectual assets?

Value Created: Here the professors would like to see reported the dollar results of all of the above. Companies would describe the changes in Resource value(s), and describe the nature of value (for a company with a subscription model, what is the value of the individual subscription; what is the value of a brand, etc.)

G&A Institute: Your new book offers very powerful arguments for fundamentally changing present-day corporate accounting and the way that investors do or do not pay attention to that accounting in their analysis and portfolio decision-making. There are a lot of vested interests in the present system; can the accounting and corporate disclosure and reporting systems be changed to reflect your recommendations?

Dr. Lev: Things change very slowly in accounting policies and practices. The systems is changing, in that public company managements are disclosing a considerable amount of information that is beyond that required for SEC filings, in the areas that we touch on in examples in our book. So there is progress. But not fast enough, I believe, to really serve investors.

G&A Institute: The SEC months ago published a Concept Release requesting public input on the present methods of corporate disclosure. We were encouraged to see more than a dozen pages in the document devoted the question of ESG metrics, sustainability information, and the like. Your thoughts on this?

Dr. Lev: We have not seen any further communication on this and there are no rules proposed. Will the new administration take any of this seriously?

Observes Dr. Lev: There are now many corporate financial statements that virtually no one understands. There is great complexity in today’s accounting. When we look at the US Environmental Protection Agency and environmental rules, we see that once rules are in place, they are constantly debated in the public arena. Unlike the EPA situation, there is presently no public interest in debating our accounting rules.

G&A Institute: Well, let me introduce here the subject of the SASB approach — the Sustainable Accounting Standards Board (SASB). Of course, the adoption of the SASB approach by a public company for adopting to their mandated reporting is voluntary at this time. What are your thoughts on this approach to this type of intangibles disclosure?

Dr. Lev: Well, the SASB recommendations are built on top of the present approach to accounting and reporting. In effect they leave the financial reporting system “as is,” with their rules built on top of a weak foundation as we outline in the book. I’ve said this at the SASB annual conference and my comments were very well received.

I did point out that the SASB approach is quite useful for investors. But the demand for voluntary disclosure by companies could create an invitation for lawsuits all over the world, if certain disclosures were made regarding a company’s environmental impacts.

G&A Institute: Well, aren’t investors seeking information such as environmental performance, as well as related risk, opportunity, more of the “E” of ESG strategies, performance, and metrics?

Dr. Lev: It depends on the setting. Our book was in process over a three-year period. My co-author and I devoted an entire year to analyzing hundreds of quarterly analyst (earnings) calls. Keep in mind that an analyst may have just one opportunity to ask the question. There were no — no — questions ever raised about ESG performance, corporate sustainability, and related topics. We reviewed, as I said, hundreds of earnings calls, with about 25-to-30 questions on each call.

G&A Institute: What kinds of questions may be directed to corporate managers on the calls about intangible items?

Dr. Lev: There were questions about the R&D efforts, the pipeline for example for pharma companies. Customer franchise was an important topic. Changes in U.S. patent law resulted in much more information being disclosed by the U.S. Patent Office related to the filings. The entire argument made for patent filing, for example, and this is a subject the analysts are interested in.

G&A Institute: Are there any discussions, analyst and corporate, about ESG/sustainability?

Dr. Lev: Yes, these questions are mostly in the one-to-one conversations. A challenge is that in my opinion, the ESG metrics available are not yet at investment-grade. There is a good bit of investor interest and discussion with companies about sustainability. The factors are quite relevant to investors. But the “how-wonderful-we-are” communications by large public companies are not really relevant to investors.

G&A Institute: What kinds of information about the CSR or environmental sustainability intangibles, in your opinion, is of importance to investors?

Dr. Lev: Think about the special capabilities of the public corporation. The organization typically has special capacity to do good. Not just to donate money, which is something the shareholders could do without the company. But to share with the stakeholder, like a community organization, the special know how and other resources to make good things happen. The world really expects this now of companies. Call it Corporate Social Responsibility if you like.

The Cisco Example

Explains Dr. Lev: Cisco is a fine example of this. The Company has a Networking Academy, and they invite people to enroll and take free educational courses to learn more about networking. There have been millions of people graduating from this academy and receiving certificates. Cisco management leverages its special capacity in doing this. And it is a good idea if you think about the impact of this far-sighted approach to generate more interest in and business with Cisco.

The Home Depot Example

Another example he offers is Home Depot. The company teams with an NGO – Kaboom — to build playgrounds for children. In terms of special capacity, HD does provide materials, but also provides company legal talent to help situate the playgrounds in the neighborhood. That is far more than throwing money at a community need.

Dr. Lev Observes: I think one of the issues is that the terminology is not clear. CSR — what is it? Good or bad for investors? Having good ideas and special capabilities is key, I think.

We asked about Dr. Milton Friedman’s Views on CSR

G&A Institute: This brings us to one of your former colleagues, Dr. Milton Friedman of the University of Chicago, who famously wrote in a New York Times magazine article that CSR is, in effect, hokum, and not the business of the company. Shareholders well being should be the main focus, and through dividends and other means, if a shareholder wants to give the money away, they can do that…not the company.

Dr. Lev: I was a student of Dr. Friedman and later a colleague at the University of Chicago after I got a Ph.D. He was a brilliant man. In my opinion, he was the greatest economist of the 20th Century and I put him on a pedestal. He liked to introduce a subject and then generate great debate on his suggestions, which he felt people could accept or reject. That, I think, is the case with his famous commentary on CSR. See, we are still debating his views today. He was proved right so many times during his time.

G&A Institute: Let’s conclude this talk with a question: Do you see a value for investors in accepting, or better understanding, such terminology as CSR and sustainability and sustainable investing?

Dr. Lev: Yes, these are important approaches for companies and investors. Four years ago I devoted a chapter to CSR in my book, “Winning Investors Over.” My views are fully set forth in the recent article, “Evaluating Sustainable Competitive Advantage,” published in the Spring 2017 issue of Journal of Applied Corporate Finance.

Notes Dr. Lev: About “CSR” — there are other terms used, of course. Varying titles are very confusing. It is not always clear what CSR or sustainability may mean. For example, the Toyota Prius is a good approach to auto use. Is manufacturing that car “good CSR,” or just good business? A measure of sustainability? CSR is hard to define, sometimes. Good corporate citizenship is good for business and good for society, I believe.

G&A Institute: Thank, you Dr. Lev, for sharing your thoughts on accounting and the reforms needed, in your book and in this conversation.

# # #

Footnotes:

The book:: The End of Accounting – and the Path Forward for Investors and Managers … by Dr,Baruch Lev (Philip Bardes Professor of Accounting and Finance at the NYU Stern School of Business and Dr. Feng Gu (Associate Professor and Chair of the Department of Accounting and Law at the University of Buffalo).

Published by Wiley & Sons, NY NY. You can find it on Amazon in print and Kindle formats.

# # #

Dr. Baruch Lev is the Philip Bardes Professor of Accounting and Finance at New York University Leonard Stern School of Business; he teaches courses in accounting, financial analysis and investor relations. He’s been with NYU for almost 20 years.

He has taught at University of Chicago; the Hebrew University of Jerusalem; Tel Aviv University (dean of the business school); University of California-Berkeley (business and law schools). He received his Bachelor of Accounting at Hebrew University; his MBA and doctorate (Accounting/Finance) are from the University of Chicago, where he was also a professor and (student of) and then academic colleague of Nobel Laureate (Economic Sciences-1976) Dr. Milton Friedman (1912-2006).

# # #

Dr. Milton Friedman’s article — “The Social Responsibility of Business is to Increase its Profits”; published in The New York Times Magazine, issue of September 13, 1970. The commentary for your reading is here: http://www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-resp-business.html

# # #

** Thanks to the “International Accounting Day” account of Luca Pacioli’s life, his work and his legacy. There is information available at: http://accountants-day.info/index.php/international-accounting-day-previous/77-luca-pacioli

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The mid-1960s….the time of the wonderful beginnings of the modern era of Corporate Social Responsibility. Corporate Citizenship. And then large corporations began backing off their prior commitments as new administrations came to power in Washington.

The relationship of large corporations to the general society (i.e., the rest of us) has long been of interest to me. My career has been an exciting journey through up and down cycles of clear demonstration of corporate social responsibility, corporate citizenship, environmental responsibility, by large corporations…and at times, and at times, a clear lack thereof.

The news has mostly been very positive for the past two decades about CSR and sustainability — and corporate citizenship. Will this continue in the months and years ahead?

This of course is a question on the minds of some as the Trump Administration and the Congress continue to at least verbally assault the New Era of Enlightenmentof the corporate sector.

Corporate-Society relations — this is something I closely monitor and am involved with daily in our Governance & Accountability Institute work, of course. And the progress made, or at times lack of progress, is a subject area that I have often commented on in my writings over the years since the 1960s.

* * * * * * *

Consider: U.S.A. – Industrial Powerhouse of the Postwar Era

The publisher of Time magazine (Henry Luce) commented that the 20th was the “American Century,” in great measure thanks to the fantastic production of the United States corporate community.

The nature of the post-World War II economy was firmly set in place by the production prowess of the war years (1941-1945), when the United States of America was the “Arsenal of Democracy,” with fantastic output of weapons and war materiel by large companies. (Ford Motor stopped making cars and instead made B-24 bombers; General Motors turned out tanks, with innovative transmissions that became best-selling features on post-war autos, etc.)

The rapid military buildup helped to lift large U.S. manufacturers and their tens of thousands of workers out of the dark days of the Great Depression era and into renewed prosperity. A “military-industrial” complex thus arose that continued through the decades onward to today. The great American middle class was set firmly in place after the war and the world’s greatest consuming economy was created in catering to the needs and wants of the population.

Because American and British bombers had devastated the factories of Germany and in other European countries, and American bombers the manufacturing facilities of the Empire of Japan, the U.S.A. dominated postwar [world] trade, for many years accounting for fully half of global trade flows.

* * * * * * *

Civil Rights in Focus

Despite the broad and inspiring progress made in uplifting American families to middle class status, not all “boats rose” on the rising tide of progress. The benefits of Corporate America were not evenly enjoyed.

The relationship of the corporate sector, and of the public sector, and the nation’s African-American population, was over the years problematic. There was discrimination in hiring, in training, in promotion, in access to goods and services; the African-American community steadily lagged behind white peer groups.

The sweeping Civil Rights Act of 1964, followed by The Voting Rights Act of 1965, set in place public sector commitments to change things, to open up opportunities in employment, in access to college education, to affordable home mortgages, and more.

Of course, not all American citizens welcomed the changes; particularly in the American South, there was pushback and protests and defiance of Federal anti-discrimination laws. (Including the landmark 1954Brown vs. Board of Ed, which seemed to assure equal education for all citizens.)

* * * * * * *

The Rise of Civil Unrest in the 1960s

With rising civil unrest in the inner cities, filling with African-Americans in the Great Migration north, there were riots in 1963 and 1964 in Birmingham and Savannah; in Chicago and Philadelphia; with both whites and blacks involved, battling each other, and more often battling police.

In 1965, there were riots in Los Angeles (the “Watts” neighborhood), 4,000 people were arrested, 34 people were killed, hundreds were injured, and tens of millions of dollars of property damage resulted.

The year 1966 brought unrest to Chicago, Los Angeles, Cleveland (“Hough” neighborhood) — 43 disorders in the U.S. in all. More people died; the National Guard was mobilized; more protests were in store for the next year. And in Spring into Summer 1967, there were riots in Tampa, Cincinnati, Atlanta, Newark and Northern New Jersey, and Detroit.

The Report of The National Advisory Commission on Civil Disorders(issued March 8, 1968) noted: The summer of 1967 again brought racial disorders to American cities, and with them, shock, fear and bewilderment to the nation. The worst came during a 2-week period in July, first in Newark (N.J.) and then in Detroit.

Said the authors. this is our basic conclusion: Our nation is moving toward two societies, one black, one white — separate and unequal.

Reaction to the disorders has quickened the movement and deepened the division. Discrimination and segregation have long permeated much of American life; they now threaten the future of every American. (end quotes).

* * * * * * *

An important irritant: the increased involvement in the war between North and South Viet Nam — a conflict in which young men of privilege (attending Ivy League schools, for example) could skip military service while a high proportion of African-Americans would be drafted and shipped to the war zone.

* * * * * * *

Corporate Sector Response

After passage of civil rights legislation, companies doing business with the Federal government were required to meet certain requirements; state and local governments had to come in line with affirmative action (such as set-asides in hiring for members of minority communities).

As the rules-of-the-road of the Federal civil rights statutes were set in place, both government agencies and America’s largest employers began to change their strategies, practices and policies to match the law of the land. This was not always easy — and certainly was not met with universal acceptance in many quarters of our population.

As the corporate community adjusted, G.A. Lloyd, a respected director public affairs/ community affairs manager at Humble Oil and Refining Company became an active public speaker on the changes taking place.

He wrote a small booklet: The Human Side of History (published 1967 – 16 pages) to help to educate his corporate community colleagues in the business sector on the changes taking place. He delivered a delivered powerful speech at University of Houston and around the Southwest, in late-December 1967, a time when I had been appointed as the “citizenship officer” of my employer, American Airlines (so I was paying close attention).

The Great Progress Made in the Private Sector

Mr. Lloyd advised us that “…leadership socially-consciouscompanies business organizations” such as those encouraged in the day’s electric utility industry association) were striving to make a difference. (Was this the beginning of modern-day “corporate social responsibility”? Perhaps.)

The corporate functions involved included public relations, community affairs/ community relations and philanthropy.

His employer — Humble Oil Company – in November 1967 was reacting very positively to key government action: passage of the Federal Civil Rights Act and the Voting Rights Act

The chairman of the board of his company, M.A. Wright, in October 1967 said: “The business community’s involvement with social problems must take a new look. In the search for solutions, they must bring into play their leadership and analytical capabilities. They must devise new and better approaches to existing public programs. Businessmen have no practical choice but to insist social problems be given the same analytical treatment that business uses in solving its own problems. ”

There were three outstanding business attributes and resources to bring to bear, the common wisdom told us: the three E’s of education, employment, environment.

G.A. Lloyd was busily telling business and academic audiences, “poor youths” were being put to work in the NASA Manned Space Center in Houston, Texas; 187 youths were recruited, paid a wage and provided training (“learning skills” was important).

Note the accepted language of the day: They were “economically-deprived boys and girls” from families of “the hard core unemployed,” and the objective was to keep them from falling into poverty as they grew up. They learned to type, run duplicating machines, operate machinery, and learn about electronic equipment.

The community-based programs that they were recruited from included: Job Fair; Junior Student Trainee Program; Job Opportunities for Youth (“JOY”); Vocational Education Program; and Back to School Youth Opportunity Campaign. Buses picked the students up, brought them to work and back home.

By the year 1967, Lloyd informed us, some 348 U.S. insurance companies had agreed to invest $1 billion to upgrade U.S. “slums” (concentrated primarily in major U.S. cities).

And more good news:

U.S. Gypsum (building materials) bought or optioned tenement buildings in Harlem and a handful in Cleveland to rehabilitate.

Smith, Kline & French (the Philadelphia pharma) rehabbed buildings in its neighborhood and sold them to the local housing authority.

Hallmark Cards in its home city of Kansas City planned over the next 16 years (that would be to 1983) to invest more than $100 million in rehabbing a “run-down” 85-acre area.

Polaroid (then based Cambridge, Massachusetts) established a “job clearing house” and invited colleagues in from more than 700 Boston-region firms to hire “underprivileged Negros” sans high school diplomas to earn that diploma on company time and expense. Companies responding supplied interviewers at the clearinghouse.

Met Life in New York City was recruiting new employees through The Urban League and social service organizations and put them through a 13-week training course. This process includes a “culture fair test” (no details provided).

Pacific Bell & Telephone dispatched African-American and Spanish-speaking recruiters out to barber shops, pool halls, beauty parlors and “where ever people meet” to identify potential new employees. Those selected were given training to develop skills; 18 of the first 20 men and 21 of the first 22 women became full-time employees.

Jobs Now (operating in Chicago) helped street gang members and those with minor criminal offenses to get local employers to look at candidates that had been on the straight-and-narrow for at least six months. High school diplomas were waived.

For his company, Humble Oil, applicants with low math and “chemical comprehension” (knowledge) were provided with lower entrance qualification testing and given training. (“They were educationally-deprived,” he noted. (In those days before self-service at gas stations the company was training minority men for jobs as service station driveway salesmen at the pump in Newark, New Jersey; Baltimore; and Los Angeles, working with local job development agencies.)

What did all of this mean for the people and communities involved?

They got a job – and a salary. And were trained.
Dignity and self-respect was restored.
They were able to buy an affordable home. With an affordable mortgage.
There were less people on the welfare rolls.
More minority youth were able to attend college. And become professionals.
There was less potential for civil unrest – the riots of recent past years.
Neighborhoods could be rehabilitated.
It was good for business — especial for the private sector. Major companies and small businesses would prosper.
Entrepreneurial businesses gained a good foothold.
These were optimum results at minimum cost, as some experts observed.

* * * * * * *

Hedley Donovan, Editor-in-Chief of Time magazine and one of the most influential of American journalists, observed that it was good business to apply the same creative radicalism used to create good, and sometimes great, products, into create “good” and “great cities.”

* * * * * * *

Importantly, a manager of public relations at giant DuPont (one of the dominant industrial firms of the era), advised that a major objective of American business should be “public service,” not just pursuit of profit. That is, public service through new or better products for the benefit of humankind…the objective is “just making money” was not sufficient, in his view.

Even in those faraway days there were many men (mostly men) who had stopped looking for work and too much unemployment concentrated in minority communities. American corporations tried to do their part to change this situation.

This was all good news, of course, but there were changes in the wind.

* * * * * * *

As a long-time student of the Corporate-Society Dynamic, I have concerns that with the election results of November 2016, there might be backsliding in the efforts of Corporate America to be “better citizens,” and to continue to “do well by doing good” in terms of benefiting the American and global societies.

We shall see. The early signs are very encouraging. So far, this is not a revival of the actions of Richard Nixon presidency. Even though then-President Nixon encouraged adoption of the Federal Environmental Actand created the US EPA, his dog whistles to the business community helped to bring about an end to much of the above described good works of many major companies.

With the rise of right-leaning political leadership, the era of “Neutron Jack” Welch at General Electric would become the model for other CEOs. Slash and burn, chop away at R&D budgets, get rid of people, concentrate on profits and not people. And please Wall Street. Not the many Main Streets of America.

Good news: We have not yet seen a repeat of the rhetoric of Professor Milton Friedman as he so eloquently stated in The New York Times Magazine of September 13, 1970: The Social Responsibility of Business is to Increase its Profits. (You can read that essay here: http://www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-resp-business.html)

In case you have not read the piece, the summation of the essay was: “…the doctrine of ‘social responsibility‘ taken seriously would extend the scope of the political mechanism to every human activity. It does not differ in philosophy from the most explicitly collectivist doctrine. It differs only by professing to believe that collectivist ends can be attained without collectivist means. That is why, in my book Capitalism and Freedom, I have called it a ‘fundamentally subversive doctrine’ in a free society, and have said that in such a society, ‘there is one and only one social responsibility of business–to use it resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.’ ”

We have come a long, long way from those positions as stated by a respected academician of his time. This is so very long ago in today’s corporate rhetoric on corporate citizenship.

What will the future hold? We’re closely watching the Trump Administration and the Congress to hear the dog whistles and see the signals perhaps being quietly sent to the business and investing communities.

With all the progress being made by “universal owners” (the all-important independent fiduciaries of our time), and wide-awake NGOs and other key stakeholders, I don’t think we’ll have a Nixon-ian and RonaldReagan type of backsliding. Not just yet. That’s the good news.

Your thoughts?

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Deniers/Destroyers are at work – at US EPA — the White House — hoping/wishing for rollback of rich Obama legacy positions on climate change issues…

by Hank Boerner – Chairman, Chief Strategist – G&A Institute

March 28, 2017

In classic-CNN style we bring you !!!BREAKING NEWS!!! – the Climate Change Deniers and Environmental Regulatory Protection Destroyers are at work in Washington DC today.

You’ve heard the news by now: President Donald Trump and EPA Administrator E. Scott Pruitt are preening and pompously strutting as they announce the important beginnings of what they want (and hope!) to be the rollback of important environmental and public health protections of the Obama Administration … you know, the “job killers” that were at work putting coal miners out of business.

At least that’s some of the twisting, grasping, pretzel-elian logic that underpins the actions taken today (which in turn tells the Trump loyal voting base that yes, still another campaign promise is being carried out on their behalf).

During his early months in office, President Barack Obama signed important Executive Orders that addressed climate change issues and global warming challenges — and please here do note that these and other Presidential EOs are always based on (1) the existing statutes enacted by Congress and (2) the authority of the Office of the President.

You remember some of the key statutes involved in these issues — The Clean Air Act(CAA); The Clean Water Act; (CWA) the foundations laid by the all-empowering National Environmental Policy Act (NEPA) …and other landmark legislation sensibly reached on a bipartisan basis over the decades since American rivers burst into flames.

Today, President Donald Trump signed [a very brief] EO with a flourish — the “Promoting Energy Independence and Economic Growth” Executive Order.

The action orders the U.S. Environmental Protection Agency to begin the [legal] process of un-doing or re-doing the nation’s Clean Power Plan, the keystone to President Obama’s actions to address global warming. (Or “climate change” if one is skittish about being on the side of the angels on this issues.)

Here is what today’s EO covers:

Executive (cabinet) departments and agencies will begin reviewing regulations that potentially burden the development/or use of domestic energy sources — and then suspend, revise or rescind those that “unduly burden” the development of domestic energy resources…beyond the degree necessary to protect the public interest.

All [Federal] agencies should take appropriate actions to promote clean air (!) and clean water (!) for the American People — oh, while following the law and the role of the Congress and the States concerning these matters. (One hopes this includes Flint, Michigan residents. We can hear great, cogent arguments in the Federal courts about all of this.)

Costs are to be considered — regarding “environmental improvements for the American People” — as, when “necessary and appropriate” environmental regulations are to be complied with…and the benefits must be greater than the cost.

This is encouraging, if only that it is stated to provide cover for legal challenges: Environmental regulations will be developed through transparent processes that employ the best available peer-reviewed science and economics!

All Federal agencies are to review actions that are described in the Trump Executive Order and then submit to the [White House] staffed departments and the Vice President their plan(s) to carry out the review for their agency.

Here’s The Important Deny/Destroy Actions

By swipe of pen, the President revoked these important cornerstones of the Obama Administration climate change legacy:

Executive Order 13653 (November 1, 2013) – “Preparing the U.S. for the Impacts of Climate Change.”

The Interagency Working Group on Social Cost of Greenhouse Gases – convened by the Council of Economic Advisors and the Director, Office of Management and Budget (OMB) — is disbanded, and the documents that established the “social cost of carbon” no longer represent public policy.

Beyond these specifics, the EO also orders the Secretary of the Interior to review its rules, and any guidance given, and (if appropriate) suspend, revise and rescind these. Included:

Final Rule (March 26, 2015) – “Oil and Gas: Hydraulic Fracturing on Federal and Indian Lands”;

“On behalf of our 300 institutional members, US SIF belies the Administration should be working aggressively to reduce carbon in the atmosphere and that this Executive Order accomplishes the opposite.

“The United States is paying a high economic price from the ravages of severe drought, wildfires and storms associated with increased atmospheric levels of carbon. This is not the time to retreat from the call to protect current and succeeding generations from the catastrophic implications of further, unrestrained climate change.”

In the US SIF biennial survey of sustainable and impact investment assets, it should be noted here that U.S. money managers with US$1.42 trillion in AUM and institutional asset owners with $2.15 trillion in assets consider climate change risk in their investment analysis — that is three times the level in the prior survey in 2014.

Now — Investors – NGOs – State and local governments – social issue activists — business leaders — Federal and State courts — can push back HARD on these moves by the Trump Administration.

Otherwise, it could be drill, baby, drill — dig, baby, dig — and, hey, it’s good for us, we are assured by the Deflector-in-Chief and his merry band of wrongheaded Deniers/Destroyers in the Nation’s capital!

What do you think — what do you have to say? Weigh in our this commentary and share your thoughts – there’s space below to continue the conversation!

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Is the Wolf disguised in sheep’s clothing? Nah — not to worry about any disguising — the wolf’s intentions were well signaled to us — the Denier/Destroyer-in-Chief at U.S. EPA is doing exactly what we expected him to do….

Remember from childhood days when our parent or caregiver told us the story of the “wolf in sheep’s clothing…” We were being cautioned, in one of the many of our early “life’s lessons,” to be careful about the advice we received, to look beyond the words, to watch people’s actions as well as hearing their words.

Because — often the legendary “wolf” would don sheep’s clothing (hey, that’s a great disguise) to mingle with the innocent flock of sheep (that the ravenous wolf really wanted to feed on). Watch out, sheep — and people!

This tale comes down to us in various forms came from different sources, including the Holy Bible, New Testament, with Jesus warning about false prophets. We’re reminded of this brief moral tale (a perennial fable of sorts that developed over the centuries) as we watched the nominees of the Trump Administration.

What do they have to say to pass muster at the U.S. Senate nominations hearing — and what are their real intentions — what will they in fact do while in office to harm our society?

Well, we don’t have to watch the top wolf there at 1200 Pennsylvania Avenue, N.W. — just down the road from the White House. The new EPA Administrator Scott Pruitt let us know with both his past performance and his clearly-stated words his intentions now that he is at the helm of the US EPA ship: he is not a believer that climate change has any relationship to human activities. Like carbon emissions – GhGs to be more accurate.

Administrator Pruitt told his CNBC interviewer on a popular cable program that many investors tune in to: “I think that measuring with precision human activity on the climate is something very challenging to do and there’s tremendous disagreement about the degree of impact, so … I would not agree that it’s a primary contributor to the global warming that we see. (Emphasis ours.)

Pruitt: “We need to continue the debate…and the review…and the analysis.” CO2 emissions are not the primary cause, the Administrator mused.

Past Actions – Prelude to Future Actions?

Keep in mind here that this is the former Oklahoma Attorney General who sued the EPA some 13 times.

As Huffington Post’s Dominique Mosbergen put it in January 2017: “It’s a safe assumption that Pruitt could be the most hostile EPA Administrator toward clean air and safe drinking water in history.”

Oh, and on his Linked In page, pre-EPA AG Pruitt noted he was “…the leading advocate against the EPA’s activist agenda…”

Commented writer Mosbergen about EPA’s role in our society (and that agenda):

“The EPA’s mission is to protect human health and the environment by issuing regulations and enforcing the nation’s environmental laws. Under President Barack Obama, the EPA created the Clean Power Plan, which aims to cut carbon pollution from power plants. It also issued new guidance for the Clean Water Act to protect thousands of waterways and wetlands, and introduced measures to limit emissions from heavy-duty trucks and reduce smog and mercury emissions from industrial sources.”

Yes, We Can Expect Changes — Dramatic at That

Now that Administrator Scott Pruit is firmly installed by fellow Senate Republicans at the EPA — we can expect these positive, fact-based actions to rapidly change. For example, here is what his own EPA (the Agency’s official web site) says about this (today):

“Recent climate changes, however, cannot be explained by natural causes alone. Research indicates that natural causes do not explain most observed warming, especially warming since the mid-20th century. Rather, it is extremely likely that human activities have been the dominant cause of that warming…”

And as posted before Election Day in October 2016: “…greenhouse gas emissions have increased the greenhouse effect and caused Earth’s surface temperature to rise. The primary human activity affecting the amount and rate of climate change is greenhouse gas emissions from the burning of fossil fuels.”

Question: Will these posts be up there next Monday morning?

These EPA positions are based in part on the National Research Council work — “Advancing the Science of Climate Warming,” published by National Academies Press.

We should keep watch on all of the EPA information channels to see the interference of the new leadership in the good work of the Agency. Watch for fake news, of course, and counter that with FACTS. Science is cool as reference point.

Watch for missing news — up there today – gone in the morning — too much information for the sheep.

The Intergovernmental Panel on Climate Change (IPCC) said in February 2017 the above after the COP 21 Paris gathering of the world’s government leaders: “The selection of the authors for the IPCC’s 1.5oC report is the first step in the critical journey started at COP 21. This special report will facilitate this important journey by assessing the available science and highlighting the policy options available to support the achievement of a climate safe, equitable and sustainable world,” said Debra Roberts, Co-Chair of Working Group II.”

Assessments of climate change by the IPCC, drawing on the work of hundreds of scientists from all over the world, enable policymakers at all levels of government in many nationsto take sound, evidence-based decisions.

They represent extraordinary value as the authors volunteer their time and expertise. The running costs of the Secretariat, including the organization of meetings and travel costs of delegates from developing countries and countries with economies in transition, are covered through the IPCC Trust Fund…”

Can we now expect that the U.S.A. — with EPA in the lead — will be absent from study and deliberations? Withdraw financial and other support from the IPCC organization? Deny the outcomes of any research? (Hmmm….we have to have more studies…”)

As the Republican Governor of Florida recently did — the state agencies can’t use such references (climate change? what’s that?).

Never mind that parts of his state will be underwater with seas rising — including Mar-a-Lago, the “other” White House sitting quite near the beautiful ocean’s edge!. Much of the Florida expensive waterfronts will move considerably far inland toward Disney World and the I-4 corridor as the oceans warm, ice shelfs recede and glaciers in Antarctica melt…and…and…

OK — we were and are warned — the dangerous wolf is in the head office and not in disguise at the EPA and the sheep (we, The People) will surely be the victims of his wrongheaded and dangerous strategies and tactics as long as he is in control.

We hear you, former EPA Administrator Gina McCarthy: “When it comes to climate change, the evidence is robust and overwhelmingly clear that the cost of inaction is unacceptably high.” We miss you, for sure!

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Keep your eye on 2060, when the Ice Age begins and Global Warming ends, say the folks at Samsung Chemical Coating (“SCC”) in The New York Times advertisement…

Did the headline grab your attention? It sure caught mine.

The headline and some of the content from a full-page advertisement appearing today in The New York Times, is signed by Samsung Chemical Coating Co. Ltd. (for the record, they’ve also said this is material “copyrighted” and not for re-distribution). This is Fair Use reporting for you.

The ad is a full page display in the well-read Science Times Section of the Times; titled: “When Global Warming Ends, about the year 2060, The Ice Age will Begin”).

There are five main messages for you from Samsung:

(1) (Perspectives About) the Beginning of Global Warming

(2) There is No Relationship Between the Amount of Carbon Dioxide Emissions and the Global Warming

(3) (About the) Ice Age Environment

(4) Large Extinction of Living Things (like all of us humans)

(5) (Message to) The US Government and Scott Pruitt, US EPA

Highlights:

Global Warming, says Samsung (SCC) management, is one of the natural phenomena that occurs at the end of inter-glacial periods. There is more explanation for you (according to the ad) in The Washington Post on February 28th of a “study” by Samsung. *

There is no relationship between CO2 emissions and global warming. It’s about Earth wobbling (“precession*), certain star tracks, and seas warming and rising.

The Earth’s glaciers (today’s Big Ice) will be reduced by Year 2060 at, the end of the inter-glacial period we’re in, and then the Earth will begin to form new glaciers; earthquakes and tsunami’s will occur; radiation from the sun will pummel Earth; extreme temperatures will occur; really large hurricanes will occur.

And then – oh, boy! — the New Ice Age coming about 2060 will reach to New York City, growing ever-taller over 200 years, and everything living will become extinct! The dead critturs will eventually drift down to decay and become coal and carbon/oil for future generations (if there any) to use. There may well be; Samsung’s paid message says creatures exposed to the sun’s radiation will mutate and new species will emerge.

Finally — Samsung, while saying that nothing can be done about the catastrophe coming, thanks to the Law of Nature (and Earth wobble, stars aligning, oceans warming, pole ice disappearing, glaciers melting and then re-forming, radiation increasing, giant storms, and more) — and so, Scott Pruitt, US EPAAdministrator, “…should review the results of ]Samsung’s] study and find ALTERNATIVE (my emphasis) MEASURES to minimize the damage of the catastrophe that will occur…”

Oh, and the future of Mankind depends on Administrator Pruitt and President Donald Trump.

A key line in the ad: “We can say that the cause of global warming is not from carbon dioxide emissions.”

The company – it’s a a privately-owned South Korean firm, according to Bloomberg LP — has run somewhat similar ads in the past. * We could find no mention of “the study” in The Washington Post edition of February 28, 2017 as mentioned in today’s ad.

We got to thinking: Is this a joke? (It’s not April 1st yet.) Someone who gave up tweeting to write more long-form messages in the wee hours of the morning? Something unusual to get us thinking? About?

Is this a planned distraction from the more pressing issues in Washington DC — like the former President spying on the new President when he was a candidate? Something really jarring to justify the drastic cuts proposed by the new administration at the US EPA? Is this fodder for global warming deniers?

The ad is real: I have a printed copy right here on the desk as it appears in the NYT ScienceTimes Section!

What to you think? Let us know….

FINALLY — there is an email in the ad if you wanted to communicate with someone:

The Trump Administration — Making moves now on the US EPA to destroy its effectiveness through budget cuts and ideological attacks on its missions.

In his landmark work published in 1993 – “A Fierce Green Fire – The American Environment Movement” – former New York Times journalist Philip Shabecoff explained: the U.S. Environmental Protection Agency was created by President Richard Nixon (a Republican) in December 1970 (two years into his first term) as part of an overall re-organization of the Federal government. The EPA was created without any benefit of statute by the U.S. Congress.

Parts of programs, departments and regulations were pulled from 15 different areas of the government and cobbled together a single environmental protection agency intended to be the watchdog, police officer and chief weapon against all forms of pollution, author Schabecoff explained to us.

The EPA quickly became the lightning rod for the nation’s hopes for cleaning up pollution and fears about intrusive Federal regulation.

As the first EPA Administrator, William Ruckelshaus (appointed by Richard Nixon) explained to the author in 1989: “The normal condition of the EPA was to be ground between two irresistible forces: the environmental movement, pushing very hard to get [pollution] emissions no matter where they were (air, water)…and another group on the side of industry pushing just as hard and trying to stop all of that stuff…” Both, Ruckelshaus pointed out, regardless of the seriousness of the problem.

We are a half-century and more beyond all of this back and forth, and the arguments about EPA’s role and importance rage on.

Today we in the sustainability movement are alarmed at the recklessness of the Trump White House and the key Administration officials now charged with responsibility to protect the environment and public health in two key cabinet departments: The EPA and the Department of Energy.

The ripple effects of the attacks on climate change science are in reality much larger: The Department of Defense (which has declared climate change to be a major threat long-term); the Department of Interior, overseeing the nation’s precious legacy of national parks and more; the Department of Agriculture (and oversight of tens of millions of acres of farmland); the Department of Commerce; the Department of Justice..and on and on.

The destruction could start early: The Washington Post (with its ear to the ground) is closely watching the administration and reported on February 17th that President Donald Trump planned to target the EPA with new Executive Orders (between two and five are coming) that would restrict the Agency’s oversight role and reverse some of the key actions that comprise the Obama Administration legacy on climate change and related issues.

Such as: rolling back the Clean Energy Plan (designed to limit power plant GhG emissions), which required states to develop their own plan as well. And, withdrawing from the critical agreement reached in Paris at COP 21 to limit the heating up of Planet Earth (which most of the other nations of the world have also adopted, notably China and India).

The destroyers now at the helm of the EPA also don’t like the Agency’s role in protecting wetlands, rivers etc. (The Post was expanding on coverage originally developed by investigative reporters at Mother Jones.)

Mother Jones quoted an official of the Trump transition team: “What I would like to see are executive orders implementing all of President Trump’s main campaign promises on environment and energy, including withdrawal from the Paris climate treaty.”

And, in the Washington Post/Mother Jones reportage: “The holy grail for conservatives would be reversing the Agency’s ‘so-called endangerment finding,’ which states that GhG emissions harm public health and must therefore be regulated [by EPA] under the Clean Air Act.”

Think about this statement by H. Sterling Burnett of the right-wing Heartland Institute: “I read the Constitution of the United States and the word ‘environmental protection’ does not appear there.” He cheered the early actions by the Trump-ians to give the green light to the Keystone Pipeline and Dakota Access Project.

On March 1st The Washington Post told us that the White House will cut the EPA staff by one-fifth — and eliminate dozens of programs.

A document obtained by the Post revealed that the cuts would help to offset the planned increase in military spending. Cutting the EPA budget from US$ 8.2 billion to $6.1 billion could have a significant [negative] impact on the Agency.

We should remember that in his hectic, frenetic campaigning, Donald Trump-the-candidate vowed to get rid of EPA in almost every present form – and his appointee, now EPA Administrator (Scott Pruitt) sued EPA over and over again when he was Attorney General of Oklahoma, challenging its authority to regulate mercury pollution, smog (fog/smoke), an power plant carbon emissions (the heart of the Obama Clean Energy Plan).

In practical terms, the Post explained, the massive Chesapeake Bay clean up project, now funded at $73 million, would be getting $5 million in the coming Fiscal Year (October 1st on). Three dozen programs would be eliminated (radon; grants to states; climate change initiatives; aid to Alaskan native villages); and the “U.S. Global Change Research Program” created by President George H.W. Bush back in 1989 would be gone.

Important elements of the American Society have tackled conservation, environmental, sustainability and related issues to reduce harm to human health and our physical home – Mother Earth – over the past five decades: Federal and state and local governments; NGOs; industry; investors; ordinary citizens; academia.

Today, the progress in protecting our nation’s resources and human health made since rivers caught fire and the atmosphere of our cities and towns could be seen and smelled, is under attack.

The good news is that for the most part, absent some elements of society, the alarms bells are going off and people are mobilizing to progress, not retreat, on environmental protection issues.

American Industry – Legacy of Three Decade Commitment to Environmental Protection – The Commitment Must Continue

The good news to look back on and then to project down to the 21st Century and Year 2017 includes the comments by leaders of the largest chemical industry player of the day as the EPA was launched and key initial legislation passed (Clean Air Act, Clean WaterAct, and many more) – that is the DuPont deNemours Company.

Think about the importance of these critical arguments – which could be considered as foundational aspirations for today’s corporate sustainability movement:

Former DuPont CEO Irving Shapiro told author Philip Shabecoff: “You’ve have to be dumb and deaf not to recognize the public gives a damn about the environment and a business man who ignores it writes his out death warrant.”

The fact is, said CEO Shapiro (who was a lawyer), “DuPont has not been disadvantaged by the environmental laws. It is a stronger company today (in the early 1990s) than it was 25 years ago. Where the environment is on the public agenda depends on the public. If the public loses interest, corporate involvement will diminish…”

His predecessor as CEO, E. S. Woolard, had observed in 1989: “Environmentalism is now a mode of operation for every sector of society, industry included. We in industry have to develop a stronger awareness of ourselves as environmentalists…”

Today let’s also consider the shared wisdom of a past administrator as she contemplated the news of the Trump Administration actions and intentions:

Former EPA Administrator Gina McCarthy (2013-2017)said tothe Post: “The [proposed] budget is a fantasy if the Trump Administration believes it will preserve EPA’s mission to protect public health. It ignores the need to invest in science and to implement the law. It ignores the history that led to the EPA’s creation 46 years ago. It ignores the American People calling for its continued support.”

Consider the DuPont’ CEO’s comments above … if the American public loses interest. At this time in our nation’s history, we must be diligent and in the streets (literally and metaphorically) protesting the moves of this administration and the connivance of the U.S. Congress if our representatives go along with EPA budget cuts as outlined to date.

# # #

About “A Fierce Green Fire: The American Environmental Movement,” by Philip Shabecoff; published 1993 by Harper Collins. I recommend a reading to gain a more complete understanding of the foundations of the environmental movement.

A decade ago I wrote a commentary on the 100-year evolvement of the conservation movement into the environmental movement and then on to today’s sustainability movement in my Corporate Finance Reviewcolumn. It’s still an interesting read: http://www.hankboerner.com/library/Corporate%20Finance%20Review/Popular%20Movements%20-%20A%20Challenge%20for%20Institutions%20and%20Managers%2003&04-2005.pdf

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Some good news to share: Several large American coal-fired electric utility plant operators are abandoning the burning of coal and moving to natural gas and renewables to generate electricity. This news was reported by The Washington Post on February 14th. Headline: “The West’s largest coal-fired power plan is closing. not even Trump can save it.”

Top of the news: a plant in Arizona that is the largest coal-fired facility in the western part of the United States (the 2,250-MW Navajo Generation Station outside Page, AZ) will be de-commissioned by the owners/operators at the end of 2019 — decades before expected, said the Post.

In the era of low natural gas prices, the use of coal would cost more to produce electric power, which would be passed on to the rate base. The US EPA had listed the plant as the #3 of the major carbon-emitting facilities.

The facility is operated by the Salt River Project, utility companies and the U.S. Bureau of Reclamation*. The facility serves the Phoenix area.

The downside: members of the Navajo and Hopi tribes would (1) lose their jobs in the Kayenta Mine that provides that provides the coal, and (2) the tribes will lose certain royalty payments. Cautionary note: The tribes of other operators could step up to continue operations.

* * * * * * * *

And less than a month earlier, in the State ofOhio the Dayton Power & Light Company and the Sierra Club reached agr3eement to close two plants (Killen and Stuart) which are coal-fired facilities. These will close in mid-2018. Stuart is a 2,440-MW plant; Killen is 666-MW.

Dayton Power & Light will develop solar power facilities to generate about half of the 555-MW by 2022.

The state’s Public Utilities Commission has the plan for its approval from DP&L. This is good news for environmental NGOs and Ohio consumers; rate payers would be paying more for their electric power with coal — and be breathing in the results of coal-burning.

All of this, of course, comes as President Trump continues to promise to bring back coal mining, and signed an Executive Order to remove the obstacle for mining companies to dump wastes into surface waters (something that President Obama moved to prevent).

The shift from coal to natural gas: Forward Momentum in 2017 for sustainability!

* * * * * * * *

Footnote: About the Bureau of Land Reclamation*, from its web site: Established in 1902, the Bureau of Reclamation is best known for the dams, powerplants, and canals it constructed in the 17 western states. These water projects led to homesteading and promoted the economic development of the West. Reclamation has constructed more than 600 dams and reservoirs including Hoover Dam on the Colorado River and Grand Coulee on the Columbia River.

The Bureau is the largest wholesaler of water in the country, bringing water to more than 31 million people, and provided one-out-of-five Western farmers (140,000) with irrigation water for 10 million acres of farmland that produce 60% of the nation’s vegetables and 25% of its fruits and nuts.

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The United States Government is the largest purchaser of goods and services in the U.S.A., and some project, in the world. (US$500 billion in the latest budget.) So – if you are selling to Uncle Sam, tune in to the guidelines recently published the Environmental Protection Agency (US EPA). In December EPA proposed (in draft form) rules for “greener and safer” products to be purchased by the Federal government.

The public comment period is open but expect that sometime soon we will see the official guidelines for supplier companies to follow. Part of the initiative is to assess the growing number of “eco-labels” in use by trade associations, NGOs, standard setters, etc.

Says EPA: “These guidelines will make it easier for Federal purchasors to meet the existing goal of 95 percent sustainable purchases, while spurring consumers and private sector to use and demand greener and safer products…” The EPA and the GSA (General Services Administration) created the guidelines for agencies and departments to use in their sourcing.

To emphasize: The Executive Order requires Federal agencies to ensure 95 percent of new contracts to be “green.”

The EPA/GSA initiative is one of the most recent steps in a continuing journey toward greater sustainability by the Federal government. Executive Order #13514 got this journey going in earnest in October 2009, soon after President Barack Obama got his administration up and running and cabinet posts filled. It’s officially the “Federal Leadership in Environmental, Energy and Economic Performance” mandate for all government agencies to follow.

Haven’t been following this EO? How about the one in August 2012 — “Accelerating Investment in Industrial Energy Efficiency?” There’s sure to be lots of risk and opportunities inherent in this EO, which addresses the US industrial sector use of energy (30% of the total usage). The Feds will encourage investment in combined heat and power systems (CHP); the effort involves key departments — Energy, Commerce, Agriculture, EPA, and the Office of Science and Technology Policy.

There’s lots going on at the Federal government level, and in similar activities in the trickle down into state and municipal governments, as some of the spate of EO’s call for assistance to public agencies at local levels.

We’ll be visiting the Federal government’s dramatic journey to greater sustainability to bring you more news and details…that could present risk or opportunity to your organization.

And in February (25 and 26) at the World Bank in Washington DC, Governance & Accountability Institute and partners, ISOS Group, will present a 2-day, interactive sustainability materiality and reporting workshop for public sector agencies and their suppliers and contractors. This is the kick off of the GRI Business Transparency Program in the USA for the Public Sector (all levels). Participants will receive certification and will enjoy specialized guidance during the 6 months that follow by G&A and ISOS.

You can also learn more about the agencies that you do business with as they publish their progress reports on sustainability. These are due this month (all agencies are supposed to report in January of each year). Also, the largest of the Federal contractors – think of Lockheed Martin or General Dynamics — are publishing sustainability reports.

Also – look at the US Postal Service and the US Army sustainability reports to get an idea of what your customers are saying about their role in the Federal sustainability journey.

Watch this space for news & updates on Federal government actions…especially as the White House issues Executive Orders in President Obama’s second (and last) term in office.

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